Todd Jacobson
NS&D Monitor
2/6/2015
The National Nuclear Security Administration downplayed this week a report by the Project on Government Oversight that raised concerns about Administrator Frank Klotz’s prior work for Department of Energy contractor Bechtel, noting that Klotz followed government guidelines in disclosing his previous work and saying his decision-making has been unaffected by his relationship with Bechtel. Klotz retired from the Air Force in 2011 as a lieutenant general and the commander of Global Strike Command and began a consulting business, taking on Bechtel as one of his clients. In 2012, he performed 12 days of work in support of Bechtel’s Y-12/Pantex bid, the NNSA and Bechtel said. He was nominated as the NNSA’s administrator in August 2013 and confirmed by the Senate in April 2014. The day after he was confirmed, he was granted a limited waiver from the Department of Energy’s Designated Agency Ethics Official for dealings with Bechtel.
An NNSA spokesperson emphasized that Klotz had nothing to do with DOE’s decision to award a Bechtel-led team the Y-12/Pantex contract, which came before he was confirmed by the Senate. POGO raised questions about Klotz’s decisionmaking on Bechtel-related issues, including the Uranium Processing Facility. “The limited waiver was granted after careful review to ensure that the highest standards for government operations were met, and does not affect General Klotz’s obligations to comply with all other applicable government ethics rules,” the spokesperson said.
In a statement, Bechtel spokesman Fred deSousa confirmed that Klotz was a consultant to Bechtel in 2012, and he said no ethics rules were violated. Bechtel-led teams run Los Alamos and Lawrence Livermore national laboratories, the Bettis and Knolls atomic power laboratories, and the Y-12 and Pantex plants. “It is normal industry practice to engage subject matter consultants to help with project matters,” de Sousa said. “We did engage Gen. Klotz as a consultant in 2012. Gen. Klotz completed his services on our behalf before his nomination in August of 2013. We believe that both Gen. Klotz and Bechtel met all of our respective legal and ethical requirements regarding these services.”
Klotz Addressed Ethics Issues Prior to Nomination
In a 2013 letter to Susan Beard, DOE’s Designated Agency Ethics Official, prior to his nomination, Klotz said he would resign from his position as a senior fellow with the Council on Foreign Relations and from his position with the Charles Stark Draper Laboratory once he was formally selected for the position by President Obama. He also said he would dissolve the consulting firm he established after he left the Air Force, Klotz Consulting Group, LLC, and resign from uncompensated positions with the Committee on International Security and Arms Control at the National Academy of Sciences and the Committee on Human Space Flight at the National Academy of Sciences. “I will not participate personally and substantially in any particular matter that has a direct and predictable effect on my financial interests or those of any person whose interests are imputed to me, unless I first obtain a written waiver … or qualify for a regulatory exemption,” Klotz said in the Aug. 2, 2013, letter to Beard.
In the letter, he said he understood he would receive a waiver to deal with Bechtel. The waiver would “not authorize me to participate in the evaluation of any application for or decision to award the Y-12 National Security [Complex] and Pantex Plant M&O contract. … Should Bechtel or a subsidiary be awarded the Y-12 M&O contract, I understand that I may fully participate in the resulting Y-12 M&O contract.”
DOE: Klotz’s Background ‘Outweighs’ Any Possible Concerns
Beard granted Klotz the limited waiver in an April 18, 2014, memo. “After consultation with the Office of the Counsel to the President, I have determined that it is in the public interest for you to participate in matters relating to Bechtel,” she wrote. “Substantial national security challenges require your expertise and judgment in making sound decisions on major defense and public security programs, several of which involve Bechtel or one of its subsidiaries.”
Beard lauded Klotz for his long service record with the Air Force and said his experience with nuclear weapons command, maintenance, diplomacy and policy “uniquely qualify” him for the position. “The Department’s interest in your ability to participate in these matters, given the critical responsibilities associated with your position, outweighs any possible concern that a reasonable person may question the integrity of DOE programs and operations,” Beard wrote.
